1 

# Westmoreland County Airport Authority Arnold Palmer Regional Airport



# Proposal Under the 

# Small Community Air Service Development Program

Westmoreland Country Airport Authority

DUNS # 023452634 Congressional District #182

Overview Air service is a process, not an event.
This has been a belief long held by the Westmoreland County Airport Authority, which proudly operates Arnold Palmer Regional Airport , l ocated in Unity Towns hip, near Latrobe, Pennsylvania

. The county is home to nearly 400,000 people and the airport’s geographic location poises it to serve areas of several surrounding counties, including Fayette, Indiana

, Somerset and eastern Allegheny , creating a catchment ar ea of more than 75 0,000 residents who find the commute to Pittsburgh International Airport, some 60 miles west of Arnold Palmer Regional, a transportation nightmare of epic proportions. Due to decade

- old traffic congestion problems, d rive times to PIT from Westmoreland County and points east commonly
exceed 90 minutes . In fact, most travelers from this region allow two full hours for the

commute to PIT. This is the prime reason that t he airport’s market region has a proven record
of viabl e scheduled air ser vice , which it has supported for more than 25 years.

S u ch successes weren’t built overnight, and the airport’s accomplishments were the product of diligence and hard work that the airport authority has never feared

. The airport has linked passengers with destinations around the world for more than a quarter of a century through hubs in Pittsburgh, and most recently, Detroit. However, s hifts in the structures and strategies of the national airline system ultimately resulted in the loss of scheduled service on July 31,

2009

.

Th e airport’s connection to the air transportation network unraveled and was finally severed
under the strain of s piking fuel prices, airline labor disputes, bankruptcies and mergers topped
with a generous helping of hemorrhaging globa l economies

. But it’s important to understand
that n one of these contributing factors were the result of any action or inaction on the airport’s part, nor were any within the airport’s control. And t h ese setbacks have served only to

ga lvanize the airport’s resolve to reestablish sorely missed and much needed air service offerings to the region it serves

.

The airport labors tirelessly to reestablish quality air service that the communities it serves have come to expect. These services remain critical to th e region’s ability to recruit and retain industry and needed jobs. As a part of that relentless pursuit, t he airport

– collectively, the

a uthority and airport management

– hereby request s funding assistance through the Small Community Air Service Developme nt Program (SCASD).

Existing Air Service at LBE Arnold Palmer Regional Airport (LBE) presently has no daily scheduled service.
Period ic public charters carry passengers to several popular casino destinations. Equipment used on these charter flights includes Boeing 737s and McDonnell

- Douglas MD 80s.

Historical Air Service at LBE Commercial flights first took wing at Arnold Palmer Regional Airport in the 1980s with Mesa Airlines, flying under the US Airways ban ner, running as many as eight flights per day to connections out of Pittsburgh International Airport (PIT).3

At th at time, US Airways was the dominant airline in the region , and the Mesa service carried some 25,000 departing passengers a year out of LBE d uring its heyday using 19

- seat twin turbo

prop aircraft

.

However, that service was grounded in 2004 in the buildup to US Airways ’ strategic decline in the western Pennsy lvania region . While the airline never satisfactorily specified reasons for halting th e service, it occurred amid its struggle with t wo separate bankruptcy filings . And, n ot long afterward, the airline signific antly slashed flights and shrunk its presence at PIT , citing an
influx of low

- cost airline competitors

. Sans its former hub status, PIT is still seeking ways to recover from the dramatic declines inflicted by the airline.

Meanwhile, in the wake of those devastating blows, Arnold Palmer Regional picked itself up
and went out on its own to become the “poster child” for success under the SCASD program. The Westmoreland County Airport Authority used a $600,000 SCASD grant in 2004 to attract and negotiate a one

- year deal with Northwest Airlines to operate daily scheduled flights through Detroit Metropolitan Airport (DTW) in Michigan. The ro ute

, f lown by Mesaba Airlines

, started in April, 2005

. A year later, Northwest agreed to susta in the service at its own risk.

This was a huge success for the airport and the communities it serves. The federal grant gave the communities the opportunity to prove to an airline that they were able to support
sustained service without the need for additional safety nets. The airport prove d that it could
be a viable, profitable market , and the airline stayed for three more years without the revenue guarantees it claimed after its maiden year at Latrobe. That relationship

– and thus, the grant funding

– w orked the way it was supposed to work.

T hen came turbulence. Northwest Airlines filed for bankruptcy. Then it merge d with Delta
Airlines

. The airport remained optimistic when Delta emerged the dominant partner and later came out to Latrobe to give its Mesaba counter a Delta

- logo makeover . The communities were encouraged when the formerly red Saab 340s flying o ut of LBE began wearing Delta colors. A
few months later

, though, the nation slipped into a global recession and Delta service out of Latrobe wasn’t the only thing to spiral into a tailspin. Service was halted on July 31, 2009.

Air Service Development Efforts

Even prior to th e departu re of Mesaba/Northwest/Delta, the authority ha d been work ing tirelessly to restore air service to LBE. While the airport continues to provide services to general aviation and business aircraft operators, the authority firmly believes that valuable connecti on s to national and global transportation networks are w hat truly open airport s to the communities

t hey serve. What makes airport s priceless asset s is the ability they afford the average citizen to
walk in the front door and ultimately arrive a t destinatio ns around the globe

. Arnold Palmer Regional had this capability, and was keenly aware of its value. However, due to circumstances beyond the authority’s control, it was lost.4

Second only to safety, reinstating air service has been a top priority for the authority. Toward this goal, the authority has aggressively pursued, met and negotiated with a number of airlines seeking service for LBE. The authority’s unwavering commitment to air service is demonstrated vividly in its standing offer to air carriers to waive all landing, ramp and terminal fees for a negotiated period if they will only provide reliable service.

A irport management has also teamed with representatives of more t han 20 commercial service airports in Pennsylvania, West Virginia and Ohio to seek new ways to improve and expand air service offerings in the region. The authority’s executive director, Gabriel E. Monzo Sr., co

chairs the Pennsylvania Air Service Committe e along with Eric Madden, Deputy Secretary of Aviation and Rail Freight for the state Department of Transportation. The committee and the authority also continually seek innovative ways to make the region’s airport facilities attractive airlines once again

.

Air Service Needs/Deficiencies The lack of an air carrier willing to step in and provide service is the only deficiency LBE has in
terms of air service

.

The airport has an 8,224

- foot

- long runway and other well

- maintained air field facilities critical to air carrier operations, including an air traffic control tower, passenger loading bridge and an efficient and comfortable terminal filled with attractive passenger amenities. The authority has also refrained from charging for parking, which offers an in centive to passengers considering other options.

Due to the maintained presence of public charter flights, Transportation Safety Administration screening equipment remains in working order within the terminal. Screeners can be called
back to staff the ai rport at a moment’s notice. The authority has also been more than willing to waive fees for airlines. There are fueling and maintenance services based on the field.

Most importantly, there is a strong business and leisure travel community ready and willi ng to support the return of scheduled service the minute the planes pull up again to the loading bridge. The only deficiency that exists is the lack of an airline willing to step forward and provide the service sorely needed by the communities the airport serves.

Strategic Plan for Meeting Air Service Needs

– Vision Airlines The Airport Authority ha s negotiated with Vision Airlines to begin service to Orlando Sanford International Airport (SFB) in the fourth quarter of 2010

. Based in Las Vegas, Nevada, t he growing airline has proposed three departures and three return flights per week on Boeing 737 300 series aircraft, with seating for 148 passengers and low

- cost fares

.

At full capacity, Vision could produce more than 21,000 passenger enplanements annua lly at

LBE

– that’s more than the annual number of passengers posted by Northwest Airlines and the airport’s charter flights combined over the past five years.5

In the communities that LBE serves, public demand has historically been high for Orlando as a
destination.

The target audience for th is initiative is a combination of business , educational institutions and leisure travelers in the airport’s service region. Marketing vehicles planned for this project include television, radio and print media outle ts throughout the service region. The airport has a standing business relationship with West Media Inc . This professional Latrobe

- based firm has historically marketed the airport’s service offerings successfully through media outlets that include, but are not limited to:

Television: Radio :
KDKA

- TV (Pittsburgh) WCNS

- AM (Latrobe area)

WTAE

- TV (Pittsburgh) Froggy 95

- FM (Johnstown, Indiana, Somerset counties)

WPXI

- TV (Pittsburgh)

WJAC

- TV (Johnstown)

Print:
Tribune

- Review (Allegheny/Westmoreland counties

L atrobe Bulletin (Latrobe area) Around Latrobe magazine (Latrobe area) Latrobe Area Chamber of Commerce (community resource guide/membership directory) Westmoreland Magazine

Internet marketing is also planned through West Media and the airport’s in

- house web site. Airport staff also does in

- house promotional presentations at local trade shows.

The timetable for the Orlando service is tentatively set to begin in November, 2010. Marketing spending would be gin immediately upon announcement of the service and receipt of funds

.

Goals and objectives for this project are clear cut

– to help ensure the success of this service at Arnold Palmer Regional Airport and to broaden the public awareness of any other potential air service offerings that may become avai lable.

Finally, it must be made clear that this grant request differs significantly from the grant award the airport received six years ago, in 2004. That SCASD grant was used for revenue guarantees as negotiated with Northwest Airlines. In this request, the airport is not offering revenue guarantees. Rather, all of the funding outlined in this project

– SCASD

, local share matching
funds and in

- kind contributions and services

– are entirely for the critical need of marketing th is new service to help ensure its success.

Additional Potentials: The Pittsburgh Connector In addition to Vision Airlines, the airport has been key in developing a n on

- demand air taxi pilot program that would not only return scheduled service to LBE, but bolster enplanements at

Pitts burgh International and other commercial service airports in and around the state, as well

, by combining traffic support from surrounding communities through one airport

.6

Channeled through the Pennsylvania Air Service Committee, the prototype program is c alled “the Pittsburgh Connector.” The concept is to create an air transportation network that would return regular flights from a number of participating airports to a central “hub” at PIT, which would afford passengers connections with most or all of the airlines that currently operate
there.

The plan

– which has been proposed with considerable interest to several air service providers that are equipped to provide and interested in providing the service

– would reinstate the system that had once thrived at the international airport under US Airways, but has since declined with the infusion of myriad “low

- cost” carriers. The fortunate byproduct is that those
low

- cost carriers would be part of the program, now, rather than a scourge to it.

The Pittsburgh C onnecter offers an efficient, logical solution to resurrecting air service in the entire region. Baggage systems have been designed to facilitate this project and gates are available to provide seamless service between the participating airports. This inno vative plan offers a unique opportunity to create a working air service model that could be implemented in other regions that face similar struggles in providing reliable air service to communities that need it. Best of all, it can be developed and sustain ed on its own merit

– not subsidized year
afte r year, whether it works or not

– and could serve as a model for rebuilding air service in other regions that have experienced similar air service losses.

More recently, the pilot program was revised and tailo red to offer a solution to meet the demand of the transportation needs of the burgeoning Marcellus Shale gas recovery industry that has been flooding the region with the promise of an extended economic boom. Officials with Arnold Palmer Regional, Pittsbur gh International and the Pennsylvania Air Service Committee have presented the proposed service to the Marcellus Shale Coalition.

Public

- Private Partnerships Air service at Arnold Palmer Regional is the epitome of a public

- private partnership.

The Westmoreland County Airport Authority is subsidized by annual operations allocations from the county general fund. The county c ommissioners also support airport with funding for special projects on a case

- by

- case basis. Air service projects receive the highest priority from the commissioners. The state Department of Transportation Bureau of Aviation has also been a staunch supporter of air service projects at Arnold Palmer Regional, offering matching funds for such needs as infrastructure improvements t o help initiate, but not sustain new air service

initiatives.

Private entities partner in these efforts in several ways. First are the local business communities, such as area chambers of commerce and larger industries individually who participate in air service needs surveys and generate support commitments that help the airport attract interest from air carriers. Local philanthropic foundations have also been generous in support for air service projects.7

Finall y, the air carriers themselves become part ners with the airport to establish and maintain the service through various agreements

. Air service operations at Arnold Palmer Regional are different than for many airports. This airport actually partners with the airlines by waiving all charges, such as landing and ramp fees, terminal rent and other services that typically generate revenue at other airports.

Arnold Palmer Regional provides all of its facilities

– baggage system, deicing equipment, passenger loading bridge, and others, including ample fr ee parking

– at no cost to the airline for a negotiated period in the interest of making the service profitable and self

- sustaining. In exchange, the airline provides the service that the airport strives to provide for the
communities it serves. It would b e nice to derive revenue from air service. But the development
of self

- sustaining service for the communities is more important to the authority at present.

Funding Needed The authority is seeking $ 5 0 0,000 in SCASD funding to be matched by a $ 1 25 ,000 (25 % ) local
shar e cash contribution to create a $625 ,000 project budget to provide critical marketing dollars to successfully launch and brand the new service to the community. The airport is also contributing $83,980 in In

- Kind contributions derived from waivers of standard facility fees and costs, including ramp and landing fees, terminal rents and costs for use of baggage system, deicing equipment and the passenger loading bridge. Total project estimated at $708,980.

Grant Program Funding Plan

Source Hard

- Dollar
Marketing

Local Match $ 125,000

SCASD Grant $ 500,000

In

- Kind Airport Contributions $ 83,980

Totals $ 708,980

There are no revenue guarantees asked or offered for the Vision service. The funding requested for that effort is purel y for marketing the new service, and would be augmented by in

- kind contributions, such as landing and ramp fees, terminal rents, facilities charges and others,
detailed below

.

In

- Kind Contributions $ 83,980

Free Parking
Terminal Rent $ 3,000 $9.50 per square foot waived

Baggage System $ 14,400 (@ $50 per use) waived

Passenger Loading Bridge $ 7,200 (@ $50 per use) waived

Deicing Equipment $ 2,500 (@ $50 per use) waived

Landing Fees $ 56,880 (at $395 per landing) waived8

Community Monitoring Arnold Palmer Regional Airport has always been looked upon as “a jewel in the crown” of the local community

– from the chamber of commerce pulpits to the editorial pages of the local newspapers. And the authority has accepted this role for the airport of a true community asset. As such, there will be no lapse in rightful scrutiny of the levels of success these air service

initiatives attain.

In the past, airport administration has publicly reported passenger enplanement figures to the authority at its regular monthly public meetings. These meetings are attended by the press, which routinely reports those figures

– good and bad

– to the community at large.

Sustaining/Maintaining Air Service The authority and all of its partners in these efforts will tak e any steps necessary and possible to assure that the service initiatives described in this application continue and maintain a self

sustainable presence of true benefit to the communities the airport serves.

Legal Sponsor

– Westmoreland County Airport Au thority

.

Conclusion The bottom line, the Westmoreland County Airport Authority is seek ing and should receive funding through the SCASD program for one reason alone: it has proven that the program
works , and it works at this airport

.

Northwest AirLink ser vice was attracted, negotiated and established at Arnold Palmer Regional Airport with assistance from a 2004 SCASD grant and the airport went on to keep that service flying for three subsequent years after the initial one

- year revenue guarantee period expi red. It is also mutually agreed that the service would still be profitable here were it not for the events and situations described earlier in this application.

The airport and its public

- private network of support partnered with an airline to make it wor k for our communities until economic conditions and situations beyond the airport’s control rendered the service inoperable. This occurred as a result of nothing the airport did or didn’t do. That’s not an excuse. It’s simply a crystallization of the facts

.

And we’ve never been an airport that shrugs and admits defeat. We’ve stayed on our feet and

we a re still swinging. Now that economic conditions are stabilizing and airlines are once again looking to initiate service where it is profitable, the authorit y is positioning itself to resurrect the vitality and excitement of new air service for the region it serves. This request for funding assistance is critical to the authority’s ability to level the playing field for a deserving community . We ask the depart ment to grant us another chance to prove once again that Arnold Palmer Regional Airport in southwestern Pennsylvania is precisely the type of market
that can render the Small Community Air Service Development grant program successful

.3975 Johns Creek C t.
Suite 100A
Suwanee, GA 30024

Phone: 770-813-4200
Direct: 770-813-4207

Fax: 770- 813-4292 E-mail: mholliday@visionairlines.com

Online: visionairlines.com

August 19, 2010

Mr. Gabriel E. Monzo Sr.

Executive Director Arnold Palmer Regional Airport Westmoreland County Airport Authority

148 Aviation Lane Latrobe PA, 15650

Re: Vision Airlines’ Letter of Interest / Arnold Pa lmer Regional Airport

Dear Mr. Monzo:

On behalf of Vision Airlines, I want to express our company’s strong interest in providing air carrier service to and from Arnold Palmer Regional Airport (LBE) for Westmoreland and its surrounding counties. It is our belief that Westmo reland County’s population of 370,000 combined with the catchment of adjacent counties, Vision Airlines can build a sufficient customer base that would enable it to offer low-fare service three (3) times weekly to Orlando-Sanford, Florida. In addition, lowfare service from Latrobe, Pennsylvania to other le isure destinations may be viable.

As you are aware, the economic environment facing a ir service development today is challenging. Vision Airlines is looking to communit ies such as yours to assist it in reducing operatin g costs and actively promote new services. We recogni ze that opportunities for local funding may be limited; however, support through a Small Community Air Service Development grant may provide the funding Vision Airlines needs in order to launch an Orlando-Sanford air service. This service would n ot only re-introduce regularly scheduled air service t o your community, but also begin the process of building enplanements back to the 1990s peak level of over 60,000.

Vision Airlines understands that a productive publi c / private partnership is the cornerstone of successful new air service. Together we can rebuil d dependable air service and provide low-fare air

travel to the citizens of Westmoreland and its surr ounding counties, for business and pleasure.3975 Johns Creek Ct., Suite 100 Suwanee, GA 30024 Phone: (770) 813-4200 Fax: (770) 813-429 2

We look forward to building a relationship with the Westmoreland County Airport Authority and the community it serves.

Please contact me should you have any questions.

Very truly yours,

Matthew Holliday General Manager of Packaging

MH/tjw